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A monopoly that sells internationally will often try to sell its product at different prices in different countries. Consider distributors for a monopoly that are located in two countries that are adjacent to each other. The inverse demand curves in the two coun tries are P₁ = 40 - 20₁ and P₂ = 1,000 - Q₂. For simplicity, the monopoly's marginal cost is constant at MC = 20. What is the profit-maximizing price and quantity in each country? Will the monopolist necessarily be able to sell its output at those prices if shipping costs between the two countries are low? Explain.
Explain the characteristics of perfect competitive market.
how to depict equilibrium price & quantity on a graph and interpret
Ralph advertises to sell cookies for Php 200 a dozen. He
sells 75 dozen and decides that he can charge more. He raises the price
to Php 300 a dozen and sells 45 dozen. What is the elasticity of demand?
The demand function is p = 100/q and an increase in price reduces quantity demanded from q = 10 to q =5. Compute the lost consumer surplus (CS). First draw a diagram that illustrates the lost CS. Then integrate with respect to 𝑝 (the variable on the vertical axis) after finding
(1) the inverse demand function , 𝑞 =𝑓 (𝑝) and
(2) the endpoints of integration (corresponding to q = 10 to q = 5 ) on the
𝑝 axis .
What is Qs of Qs=21+2, when price is 3.25?
Kali lives on mangoes and avocados, Pm = $5, Pa = $10, and her income is $200.
Identify and illustrate on a new graph Kali’s new budget constraint if her income doubled, the price of mangoes doubled, and the price of avocados remained constant.
Household Consumption and Budget Constraints
Kali lives on mangoes and avocados, Pm = $5, Pa = $10, and her income is $200.
A. Identify her budget constraint equation and illustrate Kali’s budget line on a graph
with mangoes on the horizontal axis and avocados on the vertical axis.
B. Identify and illustrate on a new graph Kali’s new budget constraint if her income
doubled, the price of mangoes doubled, and the price of avocados remained constant.
C. Explain the impact on her real income when the price changed in the scenario in B
assuming income had remained constant.
Consider the following goods and services. Which are the most likely to be produced in a
perfectly competitive industry? Which are not? Explain why you made the choices you did,
relating your answer to the assumptions of the model of perfect competition. Please address all of
the examples below in your discussion.
1. Coca-Cola and Pepsi
2. Potatoes
3. Private physicians in your local community
4. Government bonds and corporate stocks
5. Taxicabs in Lima, Peru—a city that does not restrict entry or the prices drivers can charge
6. Oats
B) what is the mariginal rate of subsitutuion between two complementary goods ?
